Tuesday, January 12, 2016

2016 Pinto Prognostications

The only thing we know about the future is that it will be different.

Peter
Drucker

Introduction

Another year has passed –
unsteadily creeping forward at jittery speed. The US stock market declined precipitously as
2015 closed.With the start of 2016, the
news of the China stock market being closed twice caused further decline,
showing how closely the global village
is linked.

There are precarious political problems almost everywhere in
the world. Things continue to be quite different from what most people expect. During
the next years much will change.

It’s a tall order to try and summarize and prognosticate on
the multiplicity of fast-moving scenarios, but I’ll sketch out some of the
things that are expected to happen. For those who wish to dig deeper, the web
links I have provided will give more details. (1)

World Politics

The world has arrived in the 21st century, but
the worldviews of various countries seem to be stuck in different periods. Many
remain embedded in old views of more stable times. Japan is stuck in the
post-WWII order. The Islamic State wants to turn the clock back by 1,000 years.
Much of today's geopolitics reflects former times. (2)

Americans like to think of themselves as forward-looking and
progressive. But in reality, today’s US is a mix of 21st-century idealism and
19th-century power politics. The rhetoric extols democracy, human rights,
gender equality, open markets, and other obvious qualities of the 21th-century
formula. But power politics retains a 19th-century view. Powerful interests
still want to preserve US supremacy and are still willing to defend several obsolete,
undemocratic allies around the world.

Russia is a throwback to the 19th century. Putin remains in
power and is purposefully pushing his own agenda, to gain traction after oil
prices have plummeted. 60% of Russia's exports are oil and gas, which make up
over 30% of the country's GDP. Russia is trying to expand its sphere of
influence in the nearby countries and keeps challenging Western views to
protect what it sees as its core interests. This requires seizing territory or
promoting wars, which it justifies as reasonable. America and Europe are too
engaged in their own interests to move beyond ineffective rhetoric.

China has used globalization to boost its own economy, but is
not adopting a 21st-century view of world politics. After two centuries of subjugation,
the country feels rich enough and strong enough to resist foreign pressures.
That requires continued economic growth, increased military power, and consistent
efforts to regain control over territories or regions rightfully regarded as
part of China (notably Taiwan). It also seeks to establish regional hegemony in
Asia by pushing the US out of the region and motivating neighbors to accept new
Chinese power.

Poverty and corruption are still rampant in India, the
world’s largest democracy. But bright possibilities are brewing, and the world’s
most populous country could well become a superpower. The new Prime Minister’s initiatives
to create a real free market seem to be working and GDP growth keeps advancing.
According to the World Bank. India’s $1.9 trillion economy will keep expanding.
The country will inevitably overtake Japan as the world’s third largest
economy. (3)

George Friedman writes in his Geopolitics weekly letter, “The
economic crisis, while there may be one, is unimportant compared to the
conflicts within Europe and along the European-Russian borders. It is trivial
compared to the chaos in the Middle East and the economic dysfunction in China.”

USA Politics

Gallup polls show an average of 43% of Americans identified
politically as independents in 2014, a new high. In terms of national
identification with the two major parties, Democrats continued to hold an edge
over Republicans, 30% to 26%. Since 2008, the percentage of political independents
has steadily climbed from 35% to the current 43%, exceeding 40% each of the
last four years. (4)

Americans are angry. They are angry about school shootings
and taxes and mistreatment and undeserved privilege and discrimination and
government. (5)

An election year in the USA, fueled by constant discussion
and rehashing on TV and the media, generates an advertising bonanza and provides
a confused barometer of what people are thinking and feeling, regularly reset by
a variety of polls. Political TV ad spending is expected to total more than $4.4
billion for federal races this year, up from $3.8 billion in 2012.

In a democracy, politics woos support from the electorate. This
year, clearly a large segment of the population is disgruntled with “politics
as usual” which motivates them to support politicians on the fringes, or even
radical, non-politicians. So, who will be the next President of the USA? Right
now, it’s anyone’s guess.

Continuing World Chaos

The
biggest crises of the last 12 months are only going to get
worse. Following a year which saw the Nepal earthquake, two sets of
attacks on Paris, the biggest refugee crisis since World War 2, escalating
conflicts in the Mid-East and almost everywhere else, the political landscape
of 2016 will be characterized by yet more instability and a lack of global
strategy. Who can guess what chaos will be? Or, what the news will be next? (6)

The savvy and prolific John Mauldin says that economists are
useless at the job of forecasting; they don't have a clue about the future. The
Fed or government agencies don’t really know what is going on with the economy.
The mistakes and failures of Government are spectacular – and now we keep on
expecting the same people to know where the economy is, where it is going, and
how to manage monetary policy. Opinions are published everywhere and are
virtually useless. (7)

Business Trends

There’s a tremendous
change everywhere in the way people use technology to complete daily tasks. They
book plane tickets, summon taxis, collect payments, pay bills and control their
homes from their smartphone or wearable device. These tech innovations are
converging into careers and people expect it more than ever. People value the
flexibility to work from anywhere, any time, on any device, and have come to
expect this. The business benefits are substantial.

The Internet of Things will affect almost every industry. IoT
delivers vast amounts of previously unavailable information, leading to
valuable insight into customer behavior and usage, and enabling complex new
services.

Here are some key trends for as the workforce of the future:
(9)

1. The Ability To Work From
Anywhere, Anytime And On Any Device

2. Video Content Management

3. Smart Machines And Automation

4. Mobile Computing And End-User
Computing Merging

5. Mobile Cloud Computing

6. Wearable Devices

7. The Digital Enterprise – New,
ultra-productive ways to do business

8. Individual Work Style
Preferences

The workforce of the future will have grown up with
technology at their fingertips. Most people are comfortable with it and expect
access to it in their everyday life, personal or professional. This is
best exemplified by the preference for text and social media over voice calls
and email as ways of communicating. Everyone is starting to recognize that employees
of organizations that empower a flexible work style not only get more done – they
actually produce higher quality work.

Industrial Automation

I should cover my industrial automation roots. I have
drifted away in the past few years, but I still keep track and do some speeches
and consulting.

Automation, the industrial segment, is a comparatively staid
and unglamorous business. Yet again, the automation industry is declining.
Technology was expected to accelerate growth, but advances are simply not
generating the boosts in productivity and revenue to help growth.

Walt Boyes, the savvy and prolific editor & publisher of
the influential Industrial Automation
Insider(8) says in his December 2015 editorial (summarized
here):

“Some of the largest industrial
automation & controls companies were the hardest hit this year. This is
simply an example of the downward trend seen across companies and across the
industry. The primary culprit behind all the predicted doom and gloom is the
oil industry. Also, there is pressure from vendors who have entered the
automation space from the Internet of Things arena, and who are perhaps more
agile, and perhaps not so encumbered by existing product lines.

“This market is ripe for intrusive
invaders from outside with new and more sophisticated technologies. The future
of manufacturing automation will bring in new competitors, like IBM, GE, Cisco
and Google, which all have deeper pockets than the large automation vendors.
They are looking for a big money play, and will either compete with or acquire
the traditional vendors.”

“The situation is only going to get
worse in 2016.”

Consumer Tech Trends

Futurist Ray Kurzweil muses: A child in Africa with a mobile
phone has access to more information than the president of the US did 15 years
ago. The smart phone is a billion times more powerful per dollar than the
computer all the students and professors shared at Massachusetts Institute of
Technology in 1965.

At this year’s Consumer Electronics Show, the world’s
largest annual tech convention, held in Las Vegas Jan 6-9, there was more
square-footage and vendors dedicated to cars, wearables, robots and drones than
ever before — a whopping three-and-a-half football fields’ worth of space for
smart-car technologies alone. (10)

There were 4 big themes:

1. Self-driving cars get real

2. IoT and wearables get useful

3. Virtual Reality and Augmented Reality

4. The real heroes: AI, big data, and deep learning

Wearable gadgets will disappear in 2016 and will become integrated
very directly into everyday life to the extent that nobody knows someone is
wearing a wearable. Gesture-controlled gadgets are on the way.

Future
Prognostications

In the midst of this turbulence the world progresses,
seemingly peaceful on the surface.It
seems futile to predict what will happen tomorrow, let alone this year and
decade. Take a minute to read the 2015
Pinto Prognostications, which are stable enough. Indeed, very little has
shifted. (11) So, is my current pessimism just a state of mind? Or,
perhaps I’m taking too broad a view?

Here are predictions from people I respect and admire
(12):

·3D printers will print human organs using
modified stem cells with the patient's own DNA providing an inexhaustible
supply of organs and no rejection issues. We will spend considerable time
in virtual and augmented realities allowing us to visit with each other even if
hundreds of miles apart. We'll even be able to touch each other. Ray Kurzweil, inventor, pioneering computer
scientist

· In the next 10 years we will see the gradual transition from an Internet to a brain-net, in which thoughts, emotions, feelings, and memories might be transmitted instantly across the planet: Dr. Michio Kaku, professor of theoretical physics

·The evolution of M-Health (mobile diagnostics,
bio-feedback and personal monitoring) is set to revolutionize treatment of
conditions such as diabetes and high blood pressure. Dr. Anne Lise Kjaer, founder of trend forecasting agency

·Wearable mobile devices will blanket the world.
By 2025, there will be a massive Internet of everyone and everything linking
every nation, community, company and person to all of the world's knowledge. Dr. James Canton, Institute for Global
Futures

Says Mark Stevenson, author of An Optimist's Tour of the Future: “The technologies aren’t the most
important bit - it’s what society does with them”.

Millennial Optimism

Annual surveys show that “millennials” (people who are 18 to
30 years old) care about society and this reflects in their career and economic
choices. A survey during the World Economic Forum conference showed that
65% of millennials said one of their top three goals in selecting a
job was to make a difference in society, their city or country. They
also look for an opportunity to learn, followed by career advancement. (13)

As I have done previously, I conclude my 2016 summary with
optimism. In America today, eighty million millennials are coming of age and
emerging as leaders. They have begun their careers amidst a recession that has
seen record youth unemployment levels, yet they remain optimistic about their
future.

By 2020, this largest generation in US history will represent
one out of every three adults in the country. They are more ethnically and
racially diverse than their elders, they are the first generation to come of
age in a truly global world, and the first to come of age in the new digital
era.

Humans have a way of adapting to thrive. I am optimistic
about the future!